Web-only extended interview with investigative journalist Vicky Ward, author of “Kushner, Inc.: Greed. Ambition. Corruption. The Extraordinary Story of Jared Kushner and Ivanka Trump.”
At Deutsche Bank, Mr. Offit’s mandate was to lend money to big real estate developers, package the loans into securities and sell the resulting bonds to investors. He said in an interview that one way to stand out in a crowded market was to make loans that his rivals considered too risky.
In 1998, a broker contacted him to see if he would consider lending to a Wall Street pariah: Mr. Trump, who was then a casino magnate whose bankruptcies had cost banks hundreds of millions of dollars.
Mr. Offit took the meeting.
A few days later, Mr. Offit’s secretary called him. “Donald Trump is in the conference room,” she whispered. Mr. Offit said he rushed in, expecting to find an entourage. Mr. Trump was alone.
He was looking for a $125 million loan to pay for gut renovations of 40 Wall Street, his Art Deco tower in Lower Manhattan. Mr. Offit was impressed by the pitch, and the loan sailed through Deutsche Bank’s approval process.
Mr. Trump seemed giddy with gratitude, Mr. Offit recalled. He took Mr. Offit golfing. He flew him by helicopter to Atlantic City for boxing matches. He wrote a grateful note to Sidney Offit for having “a great son!”
Mr. Offit commissioned a detailed model of 40 Wall Street. A golden plaque on its pedestal bore the names and logos of Deutsche Bank and the Trump Organization. Mr. Offit gave one to Mr. Trump and kept another in his office.
Mr. Trump soon came looking for $300 million for the construction of a skyscraper across from the United Nations headquarters. The loan was approved. He wanted hundreds of millions more for his Trump Marina casino in Atlantic City. Mr. Offit pledged to line up cash for that, too.
Not long after, Edson Mitchell, a top bank executive, discovered that the signature of the credit officer who had approved the Trump Marina deal had been forged, Mr. Offit said. (Mr. Offit was never accused of forgery; the loan never went through.)
Mr. Offit was fired months later. He said it was because Mr. Mitchell claimed that he was reckless, a charge Mr. Offit disputed.
It was the first hiccup in the Trump relationship. It would not be the last.
Over the next few years, the commercial real estate group, with Mr. Kennedy now in a senior role, kept lending to Mr. Trump, including to buy the General Motors building in Manhattan. Occasionally, Justice Kennedy stopped by Deutsche Bank’s offices to say hello to the team, executives recalled.
At an annual pro-am golf tournament the bank hosted outside Boston in the early 2000s, Mr. Trump sat down for a recorded interview with the bank’s public relations staff, who asked about his experience with Deutsche Bank.
“It’s great,” Mr. Trump exclaimed, according to a person who witnessed the interview. “They’re really fast!”
In 2003, a Deutsche Bank team led by Richard Byrne — a former casino-industry analyst who had known Mr. Trump since the 1980s — was hired to sell bonds on behalf of Trump Hotels & Casino Resorts. Bank officials escorted Mr. Trump to meet institutional investors in New York and Boston, according to an executive who attended.
The so-called roadshow seemed to go well. At every stop, Mr. Trump was greeted by large audiences of fund managers, executives and lower-level employees eager to see the famous mogul. The problem, as a Deutsche Bank executive would explain to Mr. Trump, was that few of them were willing to entrust money to him.
Mr. Trump requested an audience with the bank’s bond salesmen.
According to a Deutsche Bank executive who heard the remarks, Mr. Trump gave a pep talk. “Fellas, I know this isn’t the easiest thing you’ve had to sell,” the executive recalled Mr. Trump saying. “But if you get this done, you’ll all be my guests at Mar-a-Lago,” his private club in Palm Beach, Fla.
The sales team managed to sell hundreds of millions of dollars worth of bonds. Mr. Trump was pleased with the results when a Deutsche Bank executive called, according to a person who heard the conversation.
“Don’t forget what you promised our guys,” the executive reminded him.
Mr. Trump said he did not remember and that he doubted the salesmen actually expected to be taken to Mar-a-Lago.
“That’s all they’ve talked about the past week,” the executive replied.
Mr. Trump ultimately flew about 15 salesmen to Florida on his Boeing 727. They spent a weekend golfing with Mr. Trump, two participants said.
A year later, in 2004, Trump Hotels & Casino Resorts defaulted on the bonds. Deutsche Bank’s clients suffered steep losses. This arm of the investment-banking division stopped doing business with Mr. Trump.
.. Mr. Trump told Deutsche Bank his net worth was about $3 billion, but when bank employees reviewed his finances, they concluded he was worth about $788 million, according to documents produced during a lawsuit Mr. Trump brought against the former New York Times journalist Timothy O’Brien. And a senior investment-banking executive said in an interview that he and others cautioned that Mr. Trump should be avoided because he had worked with people in the construction industry connected to organized crime.
Nonetheless, Deutsche Bank agreed in 2005 to lend Mr. Trump more than $500 million for the project. He personally guaranteed $40 million of it, meaning the bank could come after his personal assets if he defaulted.
By 2008, the riverside skyscraper, one of the tallest in America, was mostly built. But with the economy sagging, Mr. Trump struggled to sell hundreds of condominium units. The bulk of the loan was due that November.
Then the financial crisis hit, and Mr. Trump’s lawyers sensed an opportunity.
A provision in the loan let Mr. Trump partially off the hook in the event of a “force majeure,” essentially an act of God, like a natural disaster. The former Federal Reserve chairman Alan Greenspan had called the financial crisis a tsunami. And what was a tsunami if not a natural disaster?
.. One of Mr. Trump’s lawyers, Steven Schlesinger, told him the provision could be used against Deutsche Bank.
“It’s brilliant!” Mr. Schlesinger recalled Mr. Trump responding.
Days before the loan was due, Mr. Trump sued Deutsche Bank, citing the force majeure language and seeking $3 billion in damages. Deutsche Bank countersued and demanded payment of the $40 million that Mr. Trump had personally guaranteed.
With the suits in court, senior investment-banking executives severed ties with Mr. Trump.
.. Ms. Vrablic’s superiors encouraged her to make loans that rival banks dismissed as too large or complex. They saw it as a way to elbow into the hypercompetitive New York market.
.. One of Ms. Vrablic’s clients was Jared Kushner, who married Ivanka Trump in 2009. Mr. Kushner regarded Ms. Vrablic as the best banker he had ever worked with, according to a person familiar with his thinking.
Shortly after the Chicago lawsuit was settled, Mr. Kushner was told that Mr. Trump was looking for a loan and introduced him to Ms. Vrablic, according to people familiar with the relationship.
.. Mr. Trump flew Ms. Vrablic to Miami to show her a property he wanted to buy: the Doral Golf Resort and Spa. He needed more than $100 million for the 72-hole property.
Deutsche Bank dispatched a team to Trump Tower to inspect Mr. Trump’s personal and corporate financial records. The bankers determined he was overvaluing some of his real estate assets by as much as 70 percent, according to two former executives.
.. By then, though, Mr. Trump had become a reality-TV star, and he was swimming in cash from “The Apprentice.” Deutsche Bank officials also were impressed that Mr. Trump did not have much debt, according to people who reviewed his finances. Aside from his history of defaults, he was an attractive borrower.
Mr. Trump also expressed interest in another loan from the private-banking division: $48 million for the same Chicago property that had provoked the two-year court fight.
Mr. Trump told the bank he would use that loan to repay what he still owed the investment-banking division, the two former executives said. Even by Wall Street standards, borrowing money from one part of a bank to pay off a loan from another was an extraordinary act of financial chutzpah.
.. Investment-banking executives, including Anshu Jain, who would soon become Deutsche Bank’s co-chief executive, pushed back. Lending to Mr. Trump again would be foolish, they argued, and signal to clients that they could default and even sue the bank.
Executives in the private bank countered that the proposed loans had Mr. Trump’s personal guarantee and therefore were low risk. And the Chicago loan, they noted, would lead to the repayment of tens of millions of dollars that Mr. Trump still owed the investment-banking division.
A top executive with responsibility for the private bank discussed the loans with Mr. Ackermann, the chief executive, who supported them, according to two officials. A powerful committee in Frankfurt, which evaluated loans based on risks to the bank’s reputation, signed off.
“There is no objection from the bank to proceed with this client,” wrote Stuart Clarke, the chief operating officer for the Americas, in a Dec. 5, 2011, email, according to a recipient.
Deutsche Bank wired the money to Mr. Trump. The loans carried relatively low interest rates, executives said, but the business promised to be profitable: As part of the deal, Mr. Trump would hold millions of dollars in a personal account, generating fees for the bank.
“I have no recollection of having been asked to approve that private-banking loan,” Mr. Ackermann said in an interview. He added: “I would have approved it, if it came to me, if it was commercially sound.”
Ms. Vrablic’s relationship with the Trumps deepened.
Deutsche Bank lent money to Donald Trump Jr. for a South Carolina manufacturing venture that would soon go bankrupt. It provided a $15 million credit line to Mr. Kushner and his mother, according to financial documents reviewed by The Times. The bank previously had an informal ban on business with the Kushners because Jared’s father, Charles, was a felon.
In 2012, Jared Kushner recommended that the editor of The Mortgage Observer, one of the publications he owned, write a profile of Ms. Vrablic. The editor, Carl Gaines, knew Mr. Kushner was her client and objected, according to a person familiar with the exchange.
“Just go meet with her,” Mr. Kushner said. “You’ll figure something out.”
A gauzy profile of Ms. Vrablic was published in February 2013.
Shortly afterward, the private bank produced a promotional video featuring some of its marquee clients. The video was played at a retreat for Deutsche Bank’s senior leadership in Barcelona. In it, Ivanka Trump extolled the private bank’s work with her family and thanked their relationship manager, according to two people who saw the video.
.. In early 2014, Mr. Trump and his personal lawyer, Michael Cohen, approached Ms. Vrablic about more potential loans.
The owner of the Buffalo Bills had died, and the N.F.L. franchise was up for sale. Mr. Trump was interested, and he needed to show the league he had the financial wherewithal to pull off a transaction that could top $1 billion.
Mr. Trump asked Ms. Vrablic if the bank would be willing to make a loan and handed over bare-bones financial statements that estimated his net worth at $8.7 billion.
.. Mr. Cohen testified to Congress last month that the documents exaggerated Mr. Trump’s wealth. Deutsche Bank executives had reached a similar conclusion. They nonetheless agreed to vouch for Mr. Trump’s bid, according to an executive involved.
Mr. Trump’s bid did not win, but another lending opportunity soon arose.
A federal agency had selected Mr. Trump to transform the Old Post Office Building in Washington into a luxury hotel. But his financial partner — the private equity firm Colony Capital, run by Thomas J. Barrack Jr. — pulled out. Mr. Trump needed nearly $200 million.
.. Because of his decades-long pattern of defaults and his increasingly polarizing political rhetoric — among other things, he had been spreading a lie about President Barack Obama being born overseas — Mr. Trump remained untouchable for most banks.
Ms. Vrablic was willing to help.
In a memo outlining the rationale for the Old Post Office loan, Ms. Vrablic said Mr. Trump was expected to add large sums to his brokerage account if he received the loan, according to an executive who read the document.
This time, there was less internal opposition. One reason: Mr. Jain — by then the bank’s co-chief executive — had a solid relationship with Ms. Vrablic. Mr. Jain accompanied her to meetings with high-profile clients, and he praised her work to colleagues, multiple executives said.
..On a foggy Wednesday in February 2013, Ms. Vrablic and Mr. Jain went to Trump Tower to meet with Mr. Trump, according to two executives with knowledge of the meeting. Ms. Vrablic’s rapport with the client was immediately clear: Mr. Trump’s assistant greeted her as an old friend, and she seemed relaxed with Mr. Trump and his daughter, one executive said.
.. They discussed Mr. Trump’s finances over lunch, and Mr. Jain said he was surprised by his low level of debt, the executives said. After lunch, Ms. Vrablic told her colleagues that Mr. Jain had sounded upbeat about Mr. Trump’s finances.
A $170 million loan to pay for the overhaul of the Old Post Office went through in 2015, and Mr. Trump added more money to his brokerage account. (In May 2016, he reported up to $46 million of stocks and bonds in the account.)
.. On Aug. 6, 2015, Mr. Trump participated in the first Republican presidential debate. He clashed with the Fox News moderator, Megyn Kelly. He flew back to New York early the next morning. That evening, he called in to a CNN talk show and said of Ms. Kelly that there was “blood coming out of her wherever.”
In the intervening hours, Mr. Trump had used a black Sharpie to sign documents for another loan from Deutsche Bank: $19 million for the Doral resort. That brought to more than $300 million the total lent under Ms. Vrablic.
.. On the campaign trail, rivals assailed Mr. Trump’s financial history. In response, he pointed to Deutsche Bank-funded successes like the Old Post Office project, now a gleaming hotel a few blocks from the White House.
.. In early 2016, Mr. Trump asked Ms. Vrablic for one final loan, for his golf course in Turnberry, Scotland.
.. Ms. Vrablic said yes, but a fight soon erupted.
Jacques Brand, who was in charge of Deutsche Bank’s American businesses, angrily objected, partly because of Mr. Trump’s divisive rhetoric.
Ms. Vrablic appealed the decision. Senior executives in Frankfurt, including Christian Sewing, who would become chief executive in 2018, were shocked that the private bank would consider lending Mr. Trump money during the campaign, bank officials said.
The bank’s reputational risk committee killed the transaction in March 2016.
.. That same month, as The Times was preparing an article about Mr. Trump’s excommunication from Wall Street, he cited his warm relationship with Deutsche Bank.
.. “They are totally happy with me,” he said to The Times. “Why don’t you call the head of Deutsche Bank? Her name is Rosemary Vrablic. She is the boss.”
.. After Mr. Trump won the election, Deutsche Bank’s board of directors rushed to understand how the bank had become the biggest lender to the president-elect.
A report prepared by the board’s integrity committee concluded that executives in the private-banking division were so determined to win business from big-name clients that they had ignored Mr. Trump’s reputation for demagogy and defaults, according to a person who read the report.
The review also found that Deutsche Bank had produced a number of “exposure reports” that flagged the growing business with Mr. Trump, but that they had not been adequately reviewed by senior executives.
.. On Deutsche Bank’s trading floor, managers began warning employees not to use the word “Trump” in communications with people outside the bank. Salesmen who violated the edict were scolded by compliance officers who said the bank feared stoking public interest in its ties to the new president.
One reason: If Mr. Trump were to default on his loans, Deutsche Bank would have to choose between seizing his assets or cutting him a lucrative break — a situation the bank would rather resolve in private.
.. Two years after Mr. Trump was sworn in, Democrats took control of the House of Representatives. The chamber’s financial services and intelligence committees opened investigations into Deutsche Bank’s relationship with Mr. Trump. Those inquiries, as well as the New York attorney general’s investigation, come at a perilous time for Deutsche Bank, which is negotiating to merge with another large German lender.
Next month, Deutsche Bank is likely to start handing over extensive internal documents and communications about Mr. Trump to the congressional committees, according to people briefed on the process.
Ms. Vrablic, who is intensely private and rarely discusses her personal life with colleagues, declined to comment. People familiar with her thinking said she expected to be called to testify publicly on Capitol Hill.
According to “Kushner, Inc.,” Gary Cohn, former director of the National Economic Council, has told people that Ivanka Trump thinks she could someday be president. “Her father’s reign in Washington, D.C., is, she believes, the beginning of a great American dynasty,”
.. Kushner, whose pre-White House experience included owning a boutique newspaper and helming a catastrophically ill-timed real estate deal, has arrogated to himself substantial parts of American foreign policy. According to Ward, shortly after Rex Tillerson was confirmed as secretary of state, Kushner told him “to leave Mexico to him because he’d have Nafta wrapped up by October.”
.. As political actors, the couple are living exemplars of the Dunning-Kruger effect, a psychological phenomenon which leads incompetent people to overestimate their ability because they can’t grasp how much they don’t know.
Partly, the Jared and Ivanka story is about the “reality distortion field” — a term one of Ward’s sources uses about Kushner — created by great family wealth. She quotes a member of Trump’s legal team saying that the two “have no idea how normal people perceive, understand, intuit.” Privilege, in them, has been raised to the level of near sociopathy.
.. Ward, the author of two previous books about the worlds of high finance and real estate, has known Kushner slightly for a long time; she told me that when he bought The New York Observer newspaper in 2006, he tried to hire her. She knocks down the idea that either he or his wife is a stabilizing force or moral compass in the Trump administration. Multiple White House sources told her they think it was Kushner who ordered the closing of White House visitor logs in April 2017, because he “didn’t want his frenetic networking exposed.” Ward reports that Cohn was stunned by their blasé reaction to Trump’s defense of the white-nationalist marchers in Charlottesville, Va.: “He was upset that they were not sufficiently upset.”
Still, even if you assume that the couple are amoral climbers, their behavior still doesn’t quite make sense. Ward writes that Ivanka’s chief concern is her personal brand, but that brand has been trashed. The book cites an October 2017 survey measuring consumer approval of more than 1,600 brands. Ivanka’s fashion line was in the bottom 10. A leading real estate developer tells Ward that Kushner, now caught up in multiple state and federal investigations, has become radioactive: “No one will want to do business with him.” (Kushner resigned as C.E.O. of Kushner Companies in 2017, but has kept most of his stake in the business.)
To truly make sense of their motivations, Ward told me, you have to understand the gravitational pull of their fathers. Husband and wife are both “really extraordinarily orientated and identified through their respective fathers in a way that most fully formed adults are not,” she said.
“You’ll notice that the U.S. position toward Qatar changes when the Qataris bail out 666 Fifth Avenue,” said Ward, adding, “We look like a banana republic.” Maybe that’s why Jared and Ivanka appear so blithely confident. As public servants, they’re obviously way out of their depth. But as self-dealing scions of a gaudy autocracy? They’re naturals.
There are several kinds of success stories. We emphasize the ones starring brilliant inventors and earnest toilers. We celebrate sweat and stamina. We downplay the schemers, the short cuts and the subterfuge. But for every ambitious person who has the goods and is prepared to pay his or her dues, there’s another who doesn’t and is content to play the con. In the Trump era and the Trump orbit, these ambassadors of a darker side of the American dream have come to the fore.
.. What a con Holmes played with Theranos. For those unfamiliar with the tale, which the journalist John Carreyrou told brilliantly in “Bad Blood,” she dropped out of Stanford at 19 to pursue her Silicon Valley dream, intent on becoming a billionaire and on claiming the same perch in our culture and popular imagination that Steve Jobs did. She modeled her work habits and management style after his. She dressed as he did, in black turtlenecks. She honed a phony voice, deeper than her real one.
She spoke, with immaculate assurance, of a day when it might be on everyone’s bathroom counter: a time saver, a money saver and quite possibly a lifesaver. She sent early, imperfect versions of it to Walgreens pharmacies, which used it and thus doled out erroneous diagnoses to patients. She blocked peer reviews of it and buried evidence of its failures.
This went on not for months but for years, as Holmes attracted more than $900 million of investment money and lured a breathtakingly distinguished board of directors including two former secretaries of state, George Shultz and Henry Kissinger; a former secretary of defense, William Perry; and a future secretary of defense, James Mattis. What they had before them wasn’t proof or even the sturdy promise of revolutionary technology. It was a self-appointed wunderkind who struck a persuasive pose and talked an amazing game.
She was eventually found out, and faces criminal charges that could put her in prison. But there’s no guarantee of that. Meantime she lives in luxury. God bless America.
Theranos was perhaps an outlier in the scope of its deceptions, but not in the deceptions themselves. In an article titled “The Ugly Unethical Underside of Silicon Valley” in Fortune magazine in December 2016, Erin Griffith tallied a list of aborted ventures with more shimmer and swagger than substance, asserting: “As the list of start-up scandals grows, it’s time to ask whether entrepreneurs are taking ‘fake it till you make it’ too far.”